If a firm's output less than doubles when all inputs are doubled, production is said to occur under conditions of
A) increasing returns to scale.
B) imperfect competition.
C) intra-industry equilibrium.
D) constant returns to scale
E) decreasing returns to scale.

Question

Quizplus · Accepted Answer

When a firm's output increases by less than double after doubling all inputs, it is experiencing decreasing returns to scale. This means that the firm becomes less efficient as it scales up production.

If a Firm's Output Less Than Doubles When All Inputs